Some Recent Decisions on Regulators’ Investigative Powers

A helpful way to keep up with recent legal developments in Canada is to follow the output of the country’s leading law firms.

From Fraser Milner Casgrain comes a nice note on a decision of the British Columbia Court of Appeal involving an investigation by the tax authorities. As the Court explained in R. v. He, 2012 BCCA 318, holding invalid the investigation of a sushi restaurant suspected of using a ‘zapper’ to game the tax system, the power to require the production of documentation by a taxpayer can be exercised only where there is a “genuine and serious inquiry” into tax liability. A whiff of irregularity does not justify a fishing expedition (if you will!).

From Norton Rose, a review of a decision of the Quebec Court of Appeal in Autorité des marchés financiers c. Fournier, 2012 QCCA 1179 (the AMF is the Quebec securities regulator). On the advice of his lawyer, a target of an AMF investigation refused to answer questions. He was charged with refusing to testify and, though he was acquitted at first instance and successful on appeal to the Superior Court, the Court of Appeal took a dimmer view of his conduct. A reminder, then, that launching a collateral attack on a decision of a regulatory body is a dangerous course of action, because it runs the risk of incurring a criminal conviction.

This content has been updated on June 11, 2014 at 09:47.